STOCKHOLM--Hennes & Mauritz AB (HM-B.SK) said Friday that it expects to post a fiscal second-quarter loss as the substantial drop in sales from global store closures won't be offset by operating cost cuts.

The coronavirus pandemic has forced the Swedish fashion retailer to close 3,778 of its 5,065 stores as of the end of March, with sales last month falling 46% on the year.

It has reduced working hours for tens of thousands of employees, implemented temporary lay-offs and is reviewing the need for redundancies. The measures cover all areas of the business but H&M said it can't give an exact number of employees impacted.

Senior executives have taken a temporary 20% pay cut.

It has already cancelled its 2019 dividend to free up 16 billion Swedish kronor ($1.59 billion) but has taken further measures to improve liquidity, including starting rental negotiations with its landlords, scaling back capital expenditure by SEK3.5 billion, and it plans to expand credit facilities.

"The situation we find ourselves in cannot be compared with anything we have ever experienced before," said Chief Executive Helena Helmersson.

"We believe that the major changes in consumer behavior we are now seeing will further increase the digitalization of society as well as the focus on sustainability."

The company posted a net profit of SEK1.93 billion for the quarter ended Feb. 28 compared with SEK803 million a year earlier. Analysts polled by FactSet had expected a profit of SEK1.1 billion.

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